18-karat gold Rolex watch that belonged to Konrad Adenauer was auctioned in Geneva in 2011 for €142,000FABRICE COFFRINI (AFP/Getty Images)
They have a fashionable part and are at the same time a symbol of social status. A mixture of the latest technology and the know-how of a centuries-old craft. Luxury watches have always been coveted for their beauty; now they are also an asset. And very profitable. Anyone who thought conventional watches would have paid for themselves with the advent of smart devices was wrong. Between August 2018 and January 2023, the average price on the secondary market of the models of the three major brands (Rolex, Patek Philippe and Audemars Piguet) rose by 20%, despite the severe economic slowdown caused by the pandemic, according to a report published by the Boston Consulting Group (BCG) in a current study. During the same period, the US stock index S&P 500 rose just 8%.
Because money calls money, the appreciation in the value of these investments attracts new investors to the market. Pre-owned watch sales totaled $22 billion in 2021, accounting for nearly a third of the $75 billion that powered the entire global luxury watch business. “The used market has always led to obscure deals, doubts about authenticity and risks of fraud. Today, however, it is a completely transparent segment, driven by all the information shared on the Internet, which has authentication services and is made up of trained buyers and experienced sellers,” emphasize the experts from the US consultancy.
Younger consumers are one of the main drivers of the wine and rose era for luxury watches. Platforms like WatchBox, Chrono24, and Watchfinder have helped develop the market, especially among members of Gen Z and Millennials. Online sales have almost surpassed those in auction houses and will account for 60% of the used goods market by 2026, according to BCG estimates.
In addition to the strength of the new generations, millionaires are looking for alternatives to traditional investments (equities, bonds, currencies) in the face of sharply rising prices in order to hedge against inflation. And there luxury watches have also proven themselves in very complicated contexts.
An example of this is the Great Recession that followed the financial crisis. The price of watches rebounded from the 2008 lows in just two years, while other financial assets took a much longer trip across the desert.
“Investors are also drawn to these add-ons because they diversify their portfolios. Buyers see it as a stable physical store of value, backed by well-known brands and which attracts many large fortunes,” according to the advisor’s experts. Between 2013 and 2022, the price of used watches saw a 7% annual increase, outpacing the revaluation of other luxury items such as jewellery, bags, art and furniture.
mythical role models
Investor attention is focused on a small number of mythical models – Patek Philippe Nautilus, Audemars Piguet Royal Oak and Rolex Daytona and Rolex GMT-Master II – according to collector mentions on specialized platforms. “It is quite common in the secondary market for these models to be upgraded by 200% compared to their original price. Some of the Rolex Cosmograph Daytona with store valuations of $14,800 have recently sold at used auctions for prices ranging from $24,500 to $38,500,” the BCG report states.
Alongside the traditional manufacturers, a group of new independent brands are also gaining a foothold in the auctions, such as FP Journe, De Bethune and H. Moser & Cie. In these cases, investors appreciate that these are brands with high added value that are difficult to find. The used market in the US is stronger than in Europe and Asia is becoming a growth market for watch investors.
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